Bedrock forgives rent for restaurants, small businesses amid coronavirus outbreak
Detroit — Quicken Loans chairman Dan Gilbert’s real estate business is providing rent relief to several dozen restaurants and small business tenants for up to three months amid the new coronavirus pandemic, Bedrock CEO Matt Cullen told The Detroit News.
The multimillion-dollar program, Cullen said, comes after Gov. Gretchen Whitmer shut down by executive order dine-in service at restaurants, gyms, salons and other businesses to avoid the spread of the respiratory illness in an attempt to prevent hospitals from being overwhelmed.
While larger retailers might be able to handle a few months of disruption, some smaller ones fear they might not, Cullen said. In Bedrock's portfolio, 56% of retailers are closed.
“For sure, people have expressed concerns back to us,” he said. “Some came out proactively to us to say, ‘Hey, we need help.’ Others, we reached out to them, and they made it visible.”
Restaurants and retailers with less than $100 million in annual revenues in Bedrock LLC's portfolio can receive rent forgiveness for April and May, and small businesses will be eligible for an extension to June. The program additionally includes costs for maintenance and parking. State and federal regulations will help determine what qualifies as a small business.
Bedrock will not dictate how the entrepreneurs use their savings, though it hopes it will support their employees and ensure they keep their doors open.
“We wanted the focus to be on focusing on their team members and preparing to re-emerge from this in a robust way,” Cullen said.
“We’re doing what we can to help them play offense and to have a significant sense of financial security so they’re not worried day-to-day ‘hey, I can’t make the rent’ or ‘I’m digging a hole that’s too big to get out of because I’ve fallen behind on rent.’ We want to just get out in front of that.”
Entities tied to Bedrock now own more than 100 downtown properties, including much of the Woodward Avenue shopping district. Bedrock has worked to attract both national and local retailers to vacancies to create a thriving corridor.
“It’s been built up and kind of curated with national retailers to draw volume and small businesses and really cool restaurants,” Cullen said. “It’s kind of the heart and soul of that community, the small businesses.”
A survey of tenants about their needs amid the COVID-19 outbreak helped to shape the program, Cullen said. Bedrock also is helping commercial tenants connect with other local, state and federal initiatives that might help during this unprecedented time. Quicken Loans Community Fund also is working with TechTown to provide up to $5,000 to small businesses to assist in bridging the gap.
The real estate firm additionally has compiled a guide available on its website of activities these businesses are doing to keep customers and the community engaged and to support their workers. Citizen Yoga and Pure Barre are offering virtual classes. The Standby bar is selling an online cocktail recipe book to support its employees. The guide also includes how to order carry-out from popular restaurants such as Besa, Maru and Shake Shack.
Meanwhile, Bedrock and its sister companies under Gilbert’s Rock Ventures umbrella sent most of their 18,000 employees home to work remotely through April 5 because of the virus, removing additional business activity from the city’s core. The companies join other major employers in Metro Detroit, including Detroit’s three automakers, which have done the same.
The virus, however, has not disrupted the major development projects on which Bedrock is working. That includes construction on the former site of the J.L. Hudson’s department store on Woodward. The $1 billion project includes a 680-foot-tall building, which would make it the second-tallest in Michigan.
“We’re doing the constructive things we can in a safe way,” Cullen said. “We’re balancing that not much differently than the small entrepreneurs are.”